The industry assessment of organic kiwifruit seems to be mixed: Some marketing agents see the category as limited. Others are staking large chunks of their business on the category.
New Zealand-based Zespri International Ltd., which operates in the U.S. in Redwood City, Calif., as Zespri North America, counts itself among the more enthusiastic supporters of organic kiwifruit, said Karen Brux general of Zespri North America.
“We do quite a bit,” Brux said. “In fact, for Zespri, North America is a strong market for it.”
Zespri works with two major distributors in North America — Vancouver, British Columbia-based The Oppenheimer Group and Watsonville, Calif.-based Awe Sum Organics — in the organic category, Brux said.
“We do quite a bit of business,” she said. “We have a few strong retail customers. Whole Foods, of course, is one of them. We work on demos with them.”
Zespri also is working with Whole Foods to showcase organic kiwifruit growers, Brux said.
“A lot of retail customers, they want to know who grows their fruit, and we have a new section on Zespri.com that has grower bios, photos and videos,” Brux said. “It adds a message that really resonates with Whole Foods customers. We’d like to do more with them online.”
Some growers devote relatively large percentages of their kiwifruit production to organics. In Hanford, Calif., Cal Harvest Marketing Inc., sets aside about a third of its production for the category, said John Fagundes, a partner in the company.
“It’s really consumer-driven,” he said. “There’s a typical consumer-driven market. More and more people are concerned, especially about food safety in imported fruit.”
Donna Fagundes, sales manager with the company, said it has about 80 acres of organic kiwifruit.
“Last year, California’s harvest had about 175,000 tray equivalents of organic fruit, and this year, the numbers will be quite different because volume is going to be way up,” she said.
She added that organic kiwifruit sales trends match other organic items.
“Consumer beliefs are what kind of drive the organic thing,” she said. “Consumers demand it. More people want organic. It falls in place.”
Chris Zanobini, president of the Sacramento-based California Kiwifruit Commission, said there is “definitely” a strong market for organic product.
“I think the organic market for all fruits is fairly consistent,” he said. “Those who want it are going to look for it, and of course it’s going to cost more.”
It is a specialty item, said Mike Hatcher, salesman with Dinuba, Calif.-based Fruit Patch Sales LLC.
“It isn’t like there’s huge consumption vs. non-organic because it’s not that big a commodity,” he said. “Most is in conventional.”
That’s not likely to change much in the foreseeable future, Hatcher noted.
“There isn’t a huge growth in organic kiwifruit being produced,” he said. “I’d say demand isn’t like, if you’re going to buy a kiwi you have to have organic.”
Organic fruit generally ends up on the shelves of retailers that specialize in the category and not mainstream chains, said Eric Patrick, Yakima, Wash.-based marketing director for Oakland, Calif.-based Grant J. Hunt Co.
“Really, it’s driven more with stores that focus on organics,” he said. “They know their constituents, and that’s what they want.”
As with other organic items, there is a price premium on organic kiwifruit, said Tom Schultz, California Kiwi Commission District 3 commissioner and president of Marysville, Calif.-based Chase National Kiwi Farms and its marketing arm, Sierra Kiwi.
“It still appears to be getting the premium, but we have much higher costs for growing and all the documentation you need to get it to organic standards,” Schultz said, adding that his company is the largest organic kiwifruit producer in California. “The growth market for organics seems to be holding steady. In retail, we are still seeing regular growth on the organic side.”
The organic category has seen fairly dramatic growth, at least until the recession hit.
“For quite a few years, they had over 20% growth per year,” he said. “We’ve obviously seen a leveling off of that. People want pesticide-free fruit, and we fall into that category. People want safe and nutritional fruit. There is that out there, although being certified organic helps our cause.”
Tom Tjerandsen, managing director for North America with the Sonoma, Calif.-based Chilean Fresh Fruit Association, said organics’ growth rate has to be seen in proper context.
“You have to remember that the sale of organic is about 3% of the total,” he said. “If that goes up 50% in the next five years, we’ll be at 3.5%. It is a factor, and there is a market, but it’s not a big percentage of the total.”